ArcelorMittal (NYSE:MT) and the Government of Liberia have signed an amended Mineral Development Agreement (MDA), extending the steelmaker’s mining rights to 2050.
The agreement, which includes a 25-year renewal option, paves the way for a massive expansion of iron ore production and infrastructure in the West African nation.
Under the terms of the deal, ArcelorMittal will make a $200 million payment to the Liberian government.
The amendment provides the fiscal and legal certainty required for a $1.8 billion expansion project, bringing the company’s total investment in Liberia to $3.5 billion.
The centerpiece of this phase is a state-of-the-art concentrator plant that will shift operations toward higher-value, high-grade ore.
The expansion is set to quadruple output to 20 million tonnes per annum (mtpa) by 2026, up from historic levels of approximately 5 mtpa.
Furthermore, the agreement reserves rail capacity for a potential future expansion to 30 mtpa, pending the results of ongoing feasibility studies.
The deal also addresses the strategic 245-kilometer rail corridor.
While ArcelorMittal maintains reserved capacity for its ramp-up, the agreement includes provisions for multi-user access.